Government could be sued for £11bn in legal showdown over tobacco packaging
The government has been warned by one of the world's largest tobacco companies that it could be sued for as much as £11bn over plans for the mandatory plain packaging of cigarettes.
Philip Morris International (PMI) said in an official submission to a government consultation on the measure it was prepared to "protect its rights in the courts and to seek fair compensation" for the damage that would done to its business.
“It is unlawful, disproportionate, and at odds with the most-basic requirements of the rule of law,” the company added.
The tobacco giant said an independent estimate of the value its branding in the UK came to £11bn.
The government has promised to implement the policy before the next general election, but it will need approval from the EU before it is introduced in full.
Such legal challenges have long been anticipated and are one of the reasons the plans have been continually subject to delay and review. In April 2013, the Institute of Economic Affairs (IEA) released a report on plain packaging warning that the British government could be liable for up to £5bn in compensation claims, should the measure go ahead.
Five countries have already filed complaints with the World Trade Organisation (WTO) against Australia, the only country to have introduced plain packaging. The matter will now be settled in court, with the complainants arguing the law is a restriction on intellectual property rights.
PMI's statemetn comes less than a week after a petition against plain packaging gained over 100,000 signatures.
Simon Clark, director of the smokers' group Forest which runs the Hands Off Our Packs campaign, said on Wednesday:
The response demonstrates the enormous level of opposition to this ill-conceived measure. We urge the prime minister to think again.
There’s no evidence standardised packaging will have any health benefits. Advocates base their arguments not on facts but on speculation.
In July, lawyers for confectioner Mars said that plain packaging could have a major impact not only on tobacco but a host of other products, to the detriment of consumers. Mars argued that certain types of branding helped consumers to identify quality products, which had a lesser risk of being counterfeited.
Mars would certainly be vulnerable to such regulations, with ownership of Dolmio and Uncle Ben's, as well as its chocolate and petcare products.